Miami's gold trade fuels guns, gangs and profit in Latin America, where illegal mining is widespread and controlled by narco-traffickers and other criminals. The outlaw mines are poisoning workers and fragile rainforests.

Miami's gold trade fuels guns, gangs and profit in Latin America, where illegal mining is widespread and controlled by narco-traffickers and other criminals. The outlaw mines are poisoning workers and fragile rainforests. (Miami Herald / TNS)

Republic Metals, the South Florida-based gold refiner that is one of the nation’s largest, has filed for bankruptcy, a further sign of trouble for the U.S. precious metals industry, which has been targeted by federal prosecutors investigating “blood gold” for more than two years.

A family-owned company with a 38-year history in South Florida, Republic buys raw gold and silver from the United States, Canada and Latin America, processes the metal and then sells it to corporate giants, including Tiffany & Co., Apple and General Motors.

Because of its proximity to Latin America, which is rich both in gold deposits and drug traffickers seeking to launder money, Miami has become a major hub for the U.S. gold industry.

Republic’s financial problems were uncovered in April, when the company said an internal inventory could not account for a large amount of precious metal at its plant in Opa-locka. That shortfall, coupled with serious bank debt, led Republic to try to sell itself to a major Swiss gold refiner. The deal failed, leading the company to file for Chapter 11 bankruptcy in federal court in New York on Nov. 2.

The bankruptcy filing comes at a time of upheaval for the industry. The U.S. Attorney’s Office in Miami is investigating domestic gold refineries for buying illegally mined and smuggled metal from Latin America.

So-called blood gold is extracted from delicate rainforest ecosystems at great cost to the environment and local workers — and made into jewelry, bullion and electronics for U.S. consumers. Drug-trafficking organizations and criminal gangs are said to be financing a significant portion of the region’s gold trade. The metal is difficult to trace to its source and easy to smuggle, making it attractive to money launderers.

Prosecutors have already brought down a major Miami-based competitor of Republic, NTR Metals, charging three of its gold traders in a $3.6 billion money-laundering scheme. But they are continuing to investigate the industry.

There is no connection between that investigation and Republic’s bankruptcy, according to a source close to the company who was not authorized to talk on the record. Large-scale inventory shortfalls have happened at other gold refineries because of accounting errors and other mishaps.

Meanwhile, other Miami-based gold companies, including Republic, continue to face scrutiny from prosecutors, according to sources familiar with the investigation. Those sources said Republic is in negotiations with prosecutors, although the nature of those discussions isn’t clear.

Republic CEO Jason Rubin declined an interview request. So did the company’s attorney, Roy Altman. A spokeswoman for the U.S. Attorney’s Office in Miami also declined to comment.

Republic employs about 200 people, mostly at its main plant in Opa-locka.

In January, the Miami Herald published an investigative series, “Dirty Gold, Clean Cash,” showing how U.S. reliance on Latin American gold drives widespread environmental destruction, human-rights abuses and mercury poisoning.

On a visit to a ravaged Peruvian mining town this year, Pope Francis condemned illegal gold as a “false god that demands human sacrifice.”

Republic’s past dealings have caught the attention of authorities: In 2012, Republic bought a large volume of gold from a Peruvian metals dealer who is suspected by U.S. prosecutors of having links to drug traffickers. The gold dealer, Pedro Pérez Miranda, was charged this year in Miami federal court with money laundering. He’s in jail in Peru.

Between May and November of 2012, Republic bought at least 3,200 kilos of gold, worth more than $174 million, from Business Investments, one of Pérez Miranda’s companies, according to Peruvian police documents obtained by the Miami Herald..

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